HC Deb 17 May 1889 vol 336 cc356-98

As amended, considered.

* MR. GEDGE (Stockport) said:

I rise, Sir, to move that Sub-section 2, Clause 5, be omitted. I am sorry to have to do this on Report, but from a misunderstanding last night when this clause was being discussed in Committee, I was not permitted to move its rejection. I move the rejection of the clause for the reason that it is both unfair and contrary to the whole principle upon which the Estate Duty is founded with regard to property coming under probates. It is also fraught with so much delay and inconvenience as to make the collection of the moderate amount that will be received under it very detrimental, indeed, to the taxpayer. The principle of this part of the Bill is that you are taking the value of the property passing under the instru- ment regardless of the persons to whom it is payable, and when the statement of value is as much as £10,000, then the Estate Duty is to be paid. According to the Sub-section, though the value passing under the instrument—namely, the probate or letters of administration, is less than £10,000, you have to inquire where any real property has passed at the death of the same testator, either through his intestacy or by his will, or by his exercising the power of appointment by will; and if the value of the two estates comes to more than £10,000, then the people who inherit the personalty have to pay the 1 per cent on what they inherit, although it makes no matter to them whether there is real property or not. Take the concrete case in which a testator dies, leaving £6,000 worth of personalty, and divisible among his children. The executor is unable to prove that will unless he can satisfy the authorities either that the testator had or that he had not real estate amounting to at least £4,000. He has to make inquiries. He ascertains there is an estate worth £3,000 to £5,000. He has to find out the value of that estate; he has to write to ask questions about the estate with which he has nothing to do as executor; he has to go to the heir-at-law and ask questions which the heir-at-law is perfectly justified in not answering; he has to find out the gross value and the net value of the estates and the deductions. All this time he is kept waiting for the probate, the widow and children having, perhaps, nothing else to live upon. I have had practical experience of the proving of wills, and I know that it involves considerable expense to prove the value of real estate. For every sovereign brought into the coffers of the nation, there will be at least as much loss caused to the taxpayer by the expense and inconvenience which this requirement necessitates. The principle of the Bill is "what passes under the instrument," as the Chancellor of the Exchequer has chosen to call it; but this money does not pass under the instrument, and, therefore, on the Chancellor of the Exchequer's own principle, being less than £10,000, it ought not to be taxed. According to the right hon. Gentleman's Budget speech, he said it would not be taxed, and from the italics in the Bill it can be seen that the proposal is an afterthought. Second thoughts in this case were not best. I understand that the Chancellor of the Exchequer objects that, if we do not marry realty to personalty by this clause, he cannot marry personalty to realty by his new 6th Clause, and that will involve a loss of a large sum of money annually. I maintain that the two things are totally different. The 6th Clause sets forth that where the realty is less than £10,000, then inquiry is to be made, not whether the testator died possessed of personalty, but whether the person who gets the real estate gets, by the death, any additional benefit which brings the total value up to £10,000. For this benefit he has to pay, not on the personalty which he also gets, but he has to pay duty on the realty. This is perfectly just and consistent with the principle of the Bill. But, under this 5th Clause, the younger children who get the personalty pay 1 per cent, while the eldest son, who gets the real property, is not to pay anything. I submit that the Bill was very much better as framed in accordance with the original intentions of the Chancellor of the Exchequer, and I hope he will consent now to strike out this clause.

Amendment proposed, Clause 5, page 3, to leave out Sub-section 2.—(Mr. Sydney Gedge.)

Question proposed, "That Sub-section 2 stand part of the Clause."

* THE CHANCELLOR OF THE EXCHEQUER (Mr. J. G. GOSCHEN, St. George's, Hanover Square)

I do not feel justified in complying with the wish of my hon. Friend to leave out this clause, because I look upon it as part of the understanding in this matter, which was pressed upon me at an earlier stage of the Bill, and it was as a compromise that it was accepted. No doubt some of the difficulties are considerable, and it was for that reason I did not propose such a clause in the original draft. But the pressure put upon me by the right hon. Gentlemen the Members for Bradford and Wolverhampton, and others, caused me to do my best to produce a clause which should have the effect of removing an exemption, which was not considered a fair exemption, and the result of that attempt is the clause before the House. I do not think the administrative difficulties are as great as my hon. Friend suggests; but, in any case having introduced the clause partly at the suggestion and wish of the House, I should not feel quite justified in withdrawing it.

MR. GLADSTONE

I quite agree with the Chancellor of the Exchequer that the anomaly referred to was taken notice of on this side of the House in the Bill as it originally stood; that, whereas in cases of mixed estates a certain sum of money which passed at death would escape taxation, if it were not a mixed estate, it would be liable to taxation. But permit me to say two things. In the first place I certainly understood the right hon. Gentleman to say that he had not been able to see his way to framing legislation for the purpose of meeting that difficulty. Nor had I the smallest idea that an attempt was to be made for the purpose. But that objection was taken on this side of the House when we had not in view the full difference between realty and personalty. And I must own that, however good the intention of the Chancellor of the Exchequer has been in introducing this 6th Clause, as he thought, to meet the remonstrances proceeding from another part of the House, I think the right hon. Gentleman who has just spoken has distinctly shown that there has been an anomaly of a most painful kind introduced into this Bill, and that there has been an extension of taxation, not in the case of realty, but in the case of personalty. Under the clause the persons who have not any interest whatever in the realty that passes upon death, but have an interest in some personal bequest which is under £10,000, would, as the Bill. originally stood, not have been subject to taxation, but, as the Bill now stands, will be subject to taxation. I do not recollect whether it was from the benches behind me that the anomalies were pointed out as likely to occur in the case of a mixed estate, where the aggregate exceeded £10,000, and where the parts did not exceed £10,000, one of the anomalies being that the aggregate would escape taxation. Now, we find not that the objection is be met by bringing the aggregate under taxation, but by bringing a portion of the aggregate under taxation—namely, that portion of it which consists of personalty, therefore aggravating most seriously the inequality to which reference has been made to-night. I am very sorry indeed to find that we have a fresh aggravation of that anomaly which has been pointed out by the hon. Gentleman in the Motion now made. There is another point on which I want to make an observation for the purpose of clearing up any remaining doubt. The Chancellor of the Exchequer must have seen that it has been only by slow degrees that we have arrived—I suppose it has been our own fault—at any clear idea of the operation of this proposal. As I understand, the Chancellor of the Exchequer stated that the tax would be levied on the residuary legatee. I want to know whether that is so or not. And simply for the purpose of making things clear I will put a case—not an extreme case. I do not refer now to the case in which legacies are left expressly "free of duty," except to observe that I think the Bill of the Chancellor of the Exchequer ought to provide for a due construction of that phrase, because I can conceive that it may hold to apply to Estate Duty as well as to Legacy Duty. However, that is not my point. My point is, that the House ought to be clearly informed what will be the mode of operation under this Act. Will the new Estate Duty be levied upon each specific bequest in the case of personalty where the aggregate exceeds £10,000, or will it be levied upon the residue? I put it, then: Suppose the case of an estate composed of personalty, of such an amount that after paying the whole Probate Duty it leaves £50,000 for division—£20,000 each to two sons, and making the daughter the residuary legatee—is it clear that in a case of that kind the duty will be levied on the three portions separately, or levied on a portion only—that of the residuary legatee? I am under the impression, upon consideration of the case, it would be upon the portion accruing to the residuary legatee. I must observe that in that instance it becomes an aggravation of the case. The result would be that the tax would fall upon the residuary legatee, and wherever there are children, the residuary legatee or legatees are invariably one or more of the children. So that this assumes the aspect of making the children of the testator pay the tax upon the whole inheritance, of which a considerable portion, perhaps, is going to another person. I dare say the Chancellor of the Exchequer will be kind enough to reply to my questions.

* MR. GOSCHEN

I have not the right to reply, but by the kind permission of the House I may perhaps be allowed to do so. With regard to this clause, I understand the right hon. Gentleman and my hon. Friend behind me would prefer its omission. I have introduced this clause to remedy what was considered an anomaly, but if it is the general opinion that it may lead to an increased anomaly, I am perfectly prepared to revert to the original form of the Bill, and omit this Sub-section, and the other additions to the Bill which depend upon it. Now, my right hon. Friend wishes me to explain what will be the incidence of this tax. I am sorry I have not made myself plainer, but I think from the beginning I said it would be levied as the Probate Duty is.

MR. GLADSTONE

But as to the residuary legatee.

* MR. GOSCHEN

The residuary legatee pays Probate Duty in many cases. Whether this duty will fall upon him, must, of course, depend upon the dispositions under the will, and precisely as the testator takes into consideration, when he makes his will, that the Probate Duty will fall upon the residuary legatee, or I prefer to say the residue, so will he take this increased duty into consideration, and if he considers that it falls too heavily on the residuary legatees, he will make such alterations in his will as will put them in the position in which he desires to place them. I would wish to point out to the House that the whole argument of my right hon. Friend is directed not so much against the new Estate Duty as against the Probate Duty altogether. Every word said against the one can be said against the other. But I think the right hon. Gentleman will remember that he himself made some alterations in the direction of increasing the Probate Duty, and at all events, this point is clear, that the new Estate Duty will be similar in its incidence to the Probate Duty.

* MR. J. W. LOWTHER (Thanet)

My right hon. Friend has approached the subject this afternoon in so liberal a spirit, that I hope, in addition to meeting the suggestion which is now made from both sides of the House, he will also consider the expediency of reconsidering this imposition as a whole. I venture to say that this is one of the least desirable imposts which a Chancellor of the Exchequer could propose. With regard to the Estate Duty, I understand it is proposed to increase the amounts payable on succession, besides which, there is a novel method of assessing that duty. We have heard at different times of the exceptional advantages which real estate is supposed to enjoy, as compared with personalty, in respect to the Death Duties. If there be any exceptional advantages enjoyed by realty over personalty, they are more than counterbalanced by the great disadvantage under which the owner of real property approaches the question of the assessment of income tax. Those who have considered this subject must feel that if touched at all it should be dealt with in a broad and comprehensive spirit, and I believe I am fully entitled to ask the right hon. Gentleman, even at the eleventh hour, to avail himself of the opportunity of dealing with the matter in its entirety. I venture to suggest that what my right hon. Friend is now doing will render still more one-sided and unfair the position which real estate at the present moment occupies. Some hon. Gentlemen may consider that real estate ought to be subject to special disabilities, but assuming that Parliament desires to deal with the subject as a whole, fairly and justly, it cannot be denied that in some respects real estate at the present moment is placed under serious disadvantages. I do venture to hope that before the Chancellor of the Exchequer renders the anomaly still more acute, he will consider how far he can meet a legitimate demand. I ask the House to consider on this question of the Death Duties, whether the Chancellor of the Exchequer is not going far a field in having recourse to this manner of raising money for what is avowedly upon the face of it a temporary purpose. My right hon. Friend informed us that these proposals for raising additional revenue were necessitated by the proposals of the Government for Naval Defence. Without going into the merits or demerits of that question, we are aware that the expenditure will have to be discharged in the next seven years. Now, can anybody with any knowledge of contemporary history for a moment assert that a tax like this, placed upon the devolution of property, is likely, under any conceivable circumstances, to be subject to modification in a sense favourable to those who pay it? We know very well that the so-called Death Duty, especially seeing that it involves the elements of taxation of land, is not likely in the immediate future to be subject to modification.

* MR. SPEAKER

I think the right hon. Gentleman is not speaking to the Amendment, but is going into the whole question of the Death Duties, and is now making what is properly a Second Reading speech.

* MR. J. W. LOWTHER

I think I had better defer that part of my speech to the next clause. I trust, however, that my right hon. Friend will be able to hold out the hope—for I know he has approached this subject in a conciliatory spirit; he has given proof of that this afternoon—that he will be able to remove some, at any rate, of the anomalies which are involved.

Question put, and negatived. Sub-section omitted.

* MR. JAMES LOWTHER

In moving the omission of Clause 6, what I wish to urge on the Government is this, that when for a temporary purpose money is required, it appears to be singularly inconvenient to have recourse to a source of revenue which is obviously of a permanent character. On that ground I am disposed to take great exception to this clause, and I appeal to the general sense of the House when I say that if a Chancellor of the Exchequer is in future to be able to have indiscriminate recourse to the Death Duties, especially in the form which this Bill will authorize, there will be great temptation to him to impose taxation on those who have practically no voice in determining whether the tax shall be raised or not. I hope the Chancellor of the Exchequer will bear this in mind. I do not believe there ever was a Budget so thoroughly unpopular with the most thorough-going supporters of a Government, for the great majority of us have viewed the proposals of the right hon. Gentleman with a feeling approaching dismay. I do trust we shall have some hope held out to us that this Budget will not be taken as a precedent, binding us to principles which I, for one, will always protest against—namely, the principle that permanent taxation should be levied to an unfair extent upon one special class of society under the pretext of dealing with an exceptional national emergency.

Amendment proposed, "In page 4, line 41, to leave out Clause 6."—(J. Lowther.)

Question proposed, "That the words 'where the value of any succession' stand part of the Bill."

MR. ALLISON (Cumberland, Eskdale)

It is surprising to find the right hon. Gentleman who last spoke now protesting at the last moment against what he considers to be an unpopular principle. I am afraid he cannot have seen the correspondence between the Chancellor of the Exchequer and the right hon. Gentleman the Member for Lincolnshire, or his mind would have been somewhat relieved. There never was a time when the landed interest had less reason to complain than on the present occasion. The Chancellor of the Exchequer has argued again and again in this House that he has introduced no fresh anomalies into the taxation as distributed between personalty and realty, and I cannot see, when you have such anomalies as undoubtedly exist, that you make them more bearable by increasing the taxation. I think that personalty has great reason to complain, as the taxation upon it is made heavier. Now, the landed interest is going to bear of the £800,000 to be raised this year not one single penny; the whole will have to be borne by personalty, and so far is realty from bearing its fair proportion, that out of the total sum of £1,200,000 to be raised it will contribute the magnificent sum of £100,000.

* MR. GOSCHEN

I may point out that when Scotland and Ireland are brought into the calculation the amount contributed by realty is £150,000.

MR. ALLISON

I do not see that that makes the case of the right hon. Gentleman very much stronger; there still remains the fact that more than a million is contributed by personalty, and although the relative value is not more than two to one, yet personalty pays at the rate of ten to one. Again, if you take the Succession Duty as it stood last year, it pays only one million, while the Probate Duty contributes five millions, or in the proportion of one to five. Now the proportion is to be one to ten, and yet the Chancellor of the Exchequer tell us that no fresh anomaly has been introduced. I think he made a striking statement at the close of his speech last night, when he said that if the Amendment of the right hon. Gentleman the Member for Mid Lothian were carried two-thirds of the fresh impost would be swept away. Now, the proposal of the right hon. Gentleman was to avoid the tax falling on legatees receiving less than £10,000. Surely, then, the meaning of the protest of the Chancellor of the Exchequer is that two-thirds of this new taxation will be borne by these smaller legatees, which we were at first led to believe would be exempted. I must confess I think it is extremely hard that the landed interest should raise any outcry on this occasion, when it has never had less cause for doing so. The tax, in fact, will fall in great severity and most unfairly on those least able to bear it. Apparently the resources of the House are exhausted, and we cannot raise an Amendment which would prevent the tax being paid by persons who receive less than £10,000, which was the original proposal; but I think, as the right hon. Gentleman the Member for Mid Lothian said last night, it will provide a very useful cry in the country during the autumn campaign.

* MR. GOSCHEN

My right hon. Friend below me tells me that my proposals have been received with dismay by a large number of the supporters of the Government. I am quite aware that there is a proportion of our supporters who do not approve of this method of raising taxation to meet the expenditure of the country; but I am bound to say that many others have shown nothing like either dismay or disapproval. What with the opinions of hon. Members opposite, who think that personalty is too hardly dealt with, and the opinion of the right hon. Gentleman the Member for Thanet, who complains that realty is not fairly treated, I am between the devil and the deep sea. I believe, however that the Government has struck the mean between the two extremes, and has been just, as far as the imposers of a tax can ever be just. The hon. Member for the Eskdale Division has fallen into error by taking the whole value of realty, instead of the taxable value. He has suggested that the new taxation will be borne by the smallest legatees. But it has been proved over and over again that they will not suffer, and that being so, we should lose an enormous sum by accepting the principle of the right hon. Gentleman the Member for Mid Lothian, under which many a rich estate would be exempted if the residuary legatee received only a small sum.

SIR W. HARCOURT

I must say that the statement made by the right hon. Gentleman at the end of his speech last night struck us very forcibly. The Amendment was intended to prevent injustice being done to smaller people, and the right hon. Gentleman at once declared that the acceptance of the Amendment would take away two-thirds of the new tax. Now I have examined the statistical abstract in order to see what were the numbers and the amount of properties left under £10,000. The number of persons so placed were 96 per cent of those who paid probate, and the amount was one-third of the whole. If that is so, and if your new arrangement is going to strike—and strike unfairly, as we think—persons in that position, I could easily understand the views and statement of the right hon. Gentleman.

* MR. GOSCHEN

It does not touch any of these.

SIR W. HARCOURT

The arrangement of the right hon. Gentleman is so obscure that I confess it is difficult to understand it. I am not going to interfere in the domestic quarrels between the right hon. Gentleman the Chancellor of the Exchequer and the right hon. Gentleman the Member for Thanet, on the subject of the Budget, but I must say that the Chancellor of the Exchequer has met the statement of my hon. Friend the Member for Eskdale with the remarkable argument that the owners of realty complained of the Budget as well as the owners of personalty, and therefore it must be just. I fail to see the logic of that conclusion. The hon. Member for Eskdale has shown that out of a tax which will ultimately yield £1,200,000 realty has to pay £150,000 only. Will the Chancellor of the Exchequer maintain that this is the real ratio between realty and personalty in this country?

MR. J. W. LOWTHER

Unencumbered realty.

SIR W. HARCOURT

Oh, yes; we know the right hon. Gentleman is one of the champions of that system of encumbrances, of which he is so fond. I say the final judgment of this House rests on the question: Is this or not the true ratio between the two classes of property? That is a plain and simple issue. The Chancellor of the Exchequer seems to object to our putting it before the country, but if the tax is imposed, the country will be able to judge whether the House of Commons has acted fairly between these different classes of property.

* THE ATTORNEY-GENERAL (Sir R. WEBSTER, Isle of Wight)

I should like to make one or two observations, for the right hon. Gentleman opposite has attempted to lead the discussion away from the point in dispute between us. He says we have rejected an Amendment which would have removed the tax from the smaller legatees. Surely he cannot have followed the course of the discussion last night, for nobody who considered the terms of the Amendment proposed by the right hon. Gentleman the Member for Mid Lothian could possibly have thought it would relieve the small legatees in that respect. Could a clause have been inserted exempting from taxation those legatees receiving less than £10,000, that would have been desirable, but the right hon. Gentleman's Amendment would not have effected that. The right hon. Gentleman the Member for Derby has said that 96 per cent of the legatees receive under £10,000. Well, if that is so, it shows the extreme consideration which has guided my right hon. Friend in fixing the limit at that figure. It should be borne in mind that we have to deal with the gross amount, and not with the mere number of persons paying. Again, the right hon. Gentleman admitted that although the smaller legatees form 96 per cent in number, yet they represent only one-third of the sum total which will be charged with that duty, and this fact shows that the Chancellor of the Exchequer has succeeded in levying taxation on two-thirds of the amount, while leaving free 96 per cent of the total payers of the duty. I hope the right hon. Gentleman will make this clear when he comes to address the assemblies in the country to which he has referred. The right hon. Gentleman ought to have shown that this levying of the tax will cause hardship in individual cases, and that the effect of the tax being levied on individuals under the same instrument who happen to be in one class or the other will result in additional hardship being inflicted. I do not deny that hon. Members have attempted to show this.

SIR W. HARCOURT

All I ask is, is the true ratio between the properties £150,000 to £1,050,000? If it is the true ratio, I admit the arrangement is just, but I ask the Attorney General to prove it.

* SIR R. WEBSTER

The right hon. Gentleman assumed that it was not the true ratio for the purposes of his argument.

SIR W. HARCOURT

I want you to show that that is the true ratio.

* SIR R. WEBSTER

It may or not be a prudent course to discuss the total value of real property as compared with personal property as a whole, but if we enter into a discussion of that subject we must examine the whole of the burdens imposed on one class as well as the other. The right hon. Gentleman states that he will repeat these facts, which are inaccurate, on the platform in the country. Let it be known that they are inaccurate. It is because the right hon. Gentleman has failed to point out or perceive that 96 per cent of the small holders or small legatees will be left out and be free from this tax, while two-thirds of the property passing held by the richer people will be charged, that I think it necessary that the right hon. Gentleman's attention should be called to this fact before he is tempted in a moment of enthusiasm to reproduce on the platform such a misrepresentation of the position. I hope that before the right hon. Gentleman reproduces such an argument he will satisfy himself whether it has any relation to the subject we have been discussing. If he reproduces them we shall be entitled to say that his premises are incorrect, his deductions inaccurate, and his conclusions unjust.

* MR. PICTON (Leicester)

I do not think the hon. and learned Gentleman has been quite as fair as he might have been. He said the Amendment proposed by the right hon. Gentleman the Member for Mid Lothian (Mr. Gladstone) would have afforded no means of redressing what we allege to be an injustice. He must have forgotten that that Amendment provided for a sort of drawback. Surely this would have afforded some redress of the injustice of which we are complaining. Again, the hon. and learned Gentleman has said to the figures quoted by my hon. Friend (Mr. Allison) mean nothing unless we can get at what they represent. We are not without means of arriving approximately, at all events, at the value represented by a duty of £1,050,000 on personality, and £150,000 on realty. Take the Report of the Inland Revenue for 1877–78. In that year probate was paid on personalty of the value of £158,106,000, Legacy Duty was paid on property of the value of £75,619,450, and Succession Duty was paid on £43,528,597. Yes, but what did the £43,000,000 represent? Did it represent the entire value of the landed property that passed? Nothing of the kind. I believe it is generally reckoned that the Succession Duty is paid on about 13½ years' purchase of the actual rent. That is not very much more, I suppose, than half the real value; but even taking it that it represents two-thirds of the real value, which is far too advantageous to our opponents, the real value of the £43,528,597 would be £64,872,000 and a few hundreds, practically £65,000,000. If the value of the personalty and realty in the year in which we are entering is in anything like these proportions, then a more monstrously unjust impost was never passed by the House. Personalty will be charged at ten times the rate of realty.

* MR. GOSCHEN

The hon. Gentleman ought not to say that. It would be misleading the public to say we are taxing personalty at a rate ten times greater than that at which we are taxing realty.

* MR. PICTON

What we say is, that both classes of property ought to be taxed at the same rate. [The CHANCELLOR of the EXCHEQUER: "So they are."] Apart from all technicalities, I think the common sense of our fellow countrymen will hold that two kinds of property are taxed very differently in passing from one to another in death. This is only of a piece with the manner in which we have been treating them continually. I take again the year 1878–78. The charge for Probate and Legacy Duty was £7,504,000 and that for Succession Duty was only £849,510. If I am right that the £43,000,000 represents about two-thirds of the absolute value, the Succession Duty ought to have amounted to £2,826,000 instead of to £849,540. I am astonished that the right hon. Gentleman with the antecedents and political traditions of the Chancellor of the Exchequer should ever have ventured to propose so cruel and unjust an impost.

MR. ILLINGWORTH (Bradford, W.)

This is really a question for the country. The people outside will want to know whether there has been any attempt at levying an equitable tax to pay for this foolish war scare. Whatever outcry there is is by those who are pleading on behalf of settled real property, if the right hon. Gentleman (Mr. J. Lowther) will look at all sides of the question, he will see there is another class of persons affected far more seriously than those for whom he speaks.

* MR. J. W. LOWTHER

I distinctly stated that my remarks did not apply by any means exclusively to settled real property; on the contrary, what I objected to more than anything was the new method of assessment adopted by the Chancellor of the Exchequer which presses with exceptional severity on freehold estates.

MR. ILLINGWORTH

All real property is not in rural districts, and under the control of gentlemen who can boast such an ancestry as the right hon. Gentleman. I am the representative of a community where the assessment of real property is over a million sterling a year. That, of course, represents an enormous total of real property —I suppose something like £25,000,000. There are scores of other boroughs of the same character where this tax will fall infinitely more heavily than upon the interest the right hon. Gentleman represents. I say there is something despicable in the position taken up by a few Gentlemen in this House in seeking to bring extraordinary pressure on the Chancellor of the Exchequer that he will give them a promise that as soon as possible their kind of property and interest shall be relieved from this tax levied upon them.

Amendment, by leave, withdrawn.

* MR. GOSCHEN

I beg to move the omission of the words from "and where," in line 2, to "£10,000," in line 7. As we have cut out of Clause 5 what I may call the mixed estates, I propose to follow the same course here.

Amendment proposed, in page 5, line 2, to leave out after the word "pounds" to the word "a," in line 7.—(Mr. Chancellor of the Exchequer.)

Question proposed, "That the words proposed to be left out remain part of the clause."

* MR. HALDANE (Haddingtonshire)

I understand that in the Chancellor of the Exchequer's opinion this is consequential upon the omission of Sub-section 2 of Clause 5. I think I shall be able to show the House not only that this Amendment is not consequential, but that it is not one to which we ought to assent. It was proposed by the Bill to levy a duty to be collected along with Probate Duty or personalty above £10,000 in value, and it was proposed to make provision whereby the duty would be leviable in the case of personalty not amounting to £10,000, but where there was realty which brought the amount left up to that figure. It was pointed out earlier this afternoon that Sub-section 2 of Clause 5, which was, by consent, omitted, would lead to certain inconvenience. The Chancellor of the Exchequer evidently thinks that because we have omitted that clause we should omit this, although this deals purely with Succession Duty. The right hon. Gentleman's argument is that land and personalty rest on the same footing for the purpose of the Succession Duty. If that be his argument, how can he go back and ask us to say there is some analogy between this Sub-section and the Sub-section which we have already agreed to omit? I protest against the suggestion that the reasons which led to the omission of the one clause have any bearing upon this clause.

* MR. GOSCHEN

I will not press the Amendment.

Amendment, by leave, withdrawn.

Clause 18.

* MR. HALDANE

For the purpose of raising a point I raised last night, I beg to move the omission of the clause. Clause 18, in substance, provides that in order to get at contracts as distinguished from conveyances, the Conveyance Duty is to be imposed on all contracts for the sale and purchase of property; but, as in the case of certain kinds of property, and notably in the case of land in this country, it is customary, and in some cases necessary, to perfect the title by a conveyance. The Government do not desire to impose the duty on the contract in that case, because it would afterwards be collected on the conveyance. When one has a perfect legal title to land it must be conveyed by deed in order to perfect the title. In that case the section is not to operate, but I should think that in the case of at least half the land conveyed in this country, the title is subject to the technicality that the legal estate is what is called outstanding. If that is so it is not necessary to convey the property by deed, but it is the proper and almost unvarying practice to do so. The result will be that where the legal estate is outstanding the duty will have, as the clause is worded, to be paid. It is no use pointing to a subsequent part of the clause, because that does not help you. The duty will be payable upon the contract, notwithstanding that no conveyance or perfecting of the title may take place for months afterwards, and notwithstanding that the contract may go off altogether. In that case there will be a double burden: first of all, money will have been paid which never ought to have been paid, and in the second place if the money is got back, the interest on it will have been lost to the person paying the money. I do not see how the Government are to get out of the difficulty.

Amendment proposed, in page 11, line 24, to leave out Clause 18—(Mr. Haldane.)

Question proposed, "That Clause 18 stands part of the Bill."

SIR R. WEBSTER

I submit that my hon. and learned Friend has for once mistaken the point. All transactions which must be conveyed by deeds are already subject to duty under existing Acts.

* MR. HALDANE

I do not wish to press the matter. I have put my point, and I cannot at all agree with the Attorney General's explanation. I am not suggesting that the duty should not be imposed as deeds, but that it should not be imposed as contracts. The responsibility, however, rests with the Government.

Amendment, by leave, withdrawn.

Bill to be read the third time on Monday next.